Brokers and market analysts have shared their predictions of which firms might look to takeover Countrywide following the property group’s share price slump.
Mortgage Strategy reported yesterday that the estate agency, surveying and broker firm’s stocks had fallen by 91 per cent over the past year from 158.50p to 14.26p.
Industry pundits have named LSL Group, Connells, Spicerhaart, Rightmove and Foxtons as potential bidders to buy all or part of the troubled group, although others have questioned whether it will find any suitors given the challenges it faces.
Harmony Financial Services director Imran Hussain says: “These are testing times for estate agents all over the country and with more and more online offerings becoming available the likes of Countrywide have been hit the hardest the share prices losing over 90 per cent of their value in one year shows they need stable leadership and to review their whole business.
“It could potentially split the group by either closing down underperforming branches if it is unable to offer them support or sell off parts of the company to help it see through this period of uncertainty.
“There will be many investors keeping an eye on Countrywide to see what comes up for sale or where they may close branches.
“I would not be surprised if the likes of LSL, Spicerhaart and Connells who are their biggest rivals in the estate agency world may look to buy up parts of the Countrywide empire, to expand in parts of the country where they do not have as much of a presence.”
AJ Bell investment director Russ Mould says: “Countrywide could be a takeover target given its scale, although you expect any potential suitor to wait until after the shareholder meeting on 28 August to see if the emergency fundraise is approved.
“Whether there are any buyers is perhaps harder to fathom given the pressures estate agents are under from a soft housing market and structural disruption from online players such as Rightmove.
“Foxtons could be a possibility because, unlike Countrywide, it has a reasonable balance sheet and might want to diversify out of the London market.
“A private equity bidder is another possibility but both of these options are hard to see at this stage.”
But Share Centre investment research analyst Graham Spooner is doubtful that the company will have many approaches from interested bidders.
Spooner argues that the fall in value of Countrywide stock is a sign of the shift towards online estate agents and the slowdown of the UK housing market.
He says: “The company hasn’t reacted quickly enough to all the changes on the high street and the competition – if you go to any high road every other shop is an estate agents. Plus there is online competition.
“We have had a great period for the housing market and there is still demand, but that has slowed down, particularly in areas like London.
“Countrywide was in a horrible position because it had large debt, fixed costs because it is on the high street and it couldn’t compete against the online rivals and all the smaller estate agents that have been popping up.
“Is anybody going to want to jump in? I would question that.”
A spokesman for Countrywide says the company does not comment on market movements.